S&P 500 Gains 10% After Geopolitical Shock as Energy Intensity Drops

The S&P 500 index has gained 10% since March 30. This resilience follows a geopolitical crisis sparked by the start of the Iran war on Feb. 28, which drove oil prices above $110 a barrel and led the Federal Reserve to pause interest rate cuts. The market's stability is supported by a structural shift in the global economy's reliance on energy. The energy intensity of the global economy declined by 58% from 1970 to 2022, and the amount of oil needed to generate $1,000 of global GDP growth fell by 1.5 liters per year since 1984. Wall Street analysts expect 12% growth in first-quarter earnings for the S&P 500.